Mr HAWKE (Mitchell) (19:45): I rise to speak on the Appropriation Bill (No. 1) 2013-2014 and the other appropriation bills. I want to confirm that this budget—another budget in deficit and in crisis—is really another Labor budget of more debt, more chaos and more spin. Nothing has been more pertinent in that regard than witnessing the Labor Party's backbench on the delivery of the budget. I have seen budgets over the five years since I was first elected to this parliament, and I have watched budgets over many more years. The complete and utter lack of enthusiasm for the budget from the individual Labor members is quite telling about what you find with this budget, and that is: it does not have a sense of life. When the former Treasurer Peter Costello delivered a budget, you got a sense of what he was on about. You got a strong message. You got a set of policies. You got a coherent narrative. And you got enthusiasm that flowed from the delivery of that budget. Since Treasurer Swan has been in place, we really have no coherent narrative. We do not have a set of policies that people can believe in and we have a very confused mix of settings. That confusion and chaos are adding to uncertainty in the economy.

I want to speak about some of the sectors that are experiencing that confusion and chaos and the consequences that it is having. It is evident that the Labor Party had to dragoon a whole series of backbenchers into speaking on the budget. That is quite telling about how the lack of belief in what the Treasurer is doing has really come to a head. Perhaps the best feature of this budget that I have found is the fact that the government is saving $4.5 million by not proceeding with plans to filter the internet of objectionable material. As a long-term opponent of the government's mandatory internet-filtering proposal, I was very happy to see that the government was forced into a humiliating backdown on this proposal. That saving is entirely appropriate, considering that that overblown government policy would not have delivered any benefit to the Australian society and would have burdened us with overregulation in the internet space, one of the least regulated spaces that we have left. That is probably the best thing that I will mention about this budget. It does not really get much better from there.

The Leader of the Opposition, in his budget in-reply speech, stated very clearly that, if the coalition is fortunate enough to be elected in September, he will ensure that there are days of deregulation in our parliament and days where legislation will simply be repealed, consolidated or redressed. The reaction of the Labor Party and the Labor Party's backbench was again very telling. They looked at each other in stunned awe, saying, 'Is such a thing possible?' or 'That's outrageous!' 'What a fool!' 'What an idiot!' 'How could you do that?' But, when I speak to the business sector—the small business sector in particular but also medium and large enterprises—in my electorate and all around Australia, business and industry are crying out for less regulation, for less interference from government, for a removal of the tens of thousands of regulations that are burdening them and stopping them from making investment decisions, from adding additional employees and from doing their job on a day-to-day basis. For the Labor Party to react in such an incredulous way to such a simple proposal highlights everything that is wrong with government today. What we did not see from the government was a program of delegislation or deregulation, of consolidating bad laws, of fixing things, of removing unnecessary law—a deregulation program that could kick-start our economy.

Nowhere is this felt more than in the small business sector. It is telling to note that, according to questions on notice returned recently, the number of small enterprises structured as companies has dropped by 23,100 since 2006-07, the number of small enterprises that paid company tax has dropped by 19,400 since 2006-07 and the number of small enterprises with a turnover of under $2 million has dropped by 2,400 since 2006-07. Those statistics are important because they represent a diminishment of the small and medium enterprise sector because of the increase in red tape we have seen under the Labor Party, the increase in regulation and the increase in taxes and charges. Indeed, over the last four years we have seen 29 new and increased taxes, 21,000 new regulations and record government borrowing and deficits, which I will turn to in a moment.

These new regulations and taxes hit hardest on the small business sector, on those businesses which have to generate the wealth and work so hard to risk their own capital and enterprise, to employ a few people and to add capacity to their business. This is where regulation and government intervention hurt the most. The big corporations have armies of lawyers and accountants and the ability to deal with change from government. Uncertainty and constant regulation by government hit the small and medium business sector hardest. Those statistics I have just read out for the benefit of the House are indeed very telling and troubling, given that we have around two million small businesses and that there has been such a reduction, and that they do most of the employing in Australia today.

A government that ignores the small business sector, that does not have a program to provide relief and lift the burden on hardworking family businesses and small and medium businesses in our nation, does not have a plan for the revival of our economy. So when we see a budget delivered that simply takes us further into debt and deficit and that does attempt to correct some of the errors of the past by cutting some expenditure but fails to do so adequately, that does not assist the small and medium business sector by deregulating or doing anything to relieve the burden they are facing—and that burden has become intolerable.

In particular, I think all Australians will be most concerned about the issue of gross debt breaching the $300 billion ceiling for the first time. We have seen this Labor government increase the debt ceiling on two occasions now. When asked about this issue the Treasurer, instead of providing honesty and transparency for Australians in the House at question time, has failed to answer whether he will lift the debt cap above $300 billion, given that in all of the projections it is extremely likely that in the next few years that Australia will need to borrow more than $300 billion of gross debt. The dishonesty is amazing when you consider that it is there for everybody to see.

We have also seen that the fifth record deficit in five years and two more deficits issued in this budget have led to a record net debt of about $192 billion. There is no credible path back to surplus in this budget. Indeed, we have seen the emergence of structural deficit, and structural deficits require structural solutions. Yet no structural solution has been found to the structural deficit crisis in the budget. If you do not address the structural deficit problem then you cannot hope to return to surplus. The claims that the government will bring the budget back to surplus in a reasonable time frame are completely unrealistic without the structural issues being addressed. It is simply not enough to cut some expenditure and say, 'Look, we're cutting expenditure.' You must address the structural settings when you have a structural deficit. The government has failed in that regard. At the same time they are raising more than $25 billion in higher taxes over the next five years and they are breaking their election commitments—although that is a regular, commonplace feature of this Labor government; it is hardly remarkable anymore when they break a promise—such as the scrapped family tax cuts and family payments and the other measures in the private health area. I think when you put all that into the blender you find a country that cannot get a sense of where this government is going.

There is no doubt that economic confidence is the other missing feature in our economy at the moment. Not only are business conditions difficult; not only is the global financial crisis continuing to impact upon the operation of our economy and the confidence of businesses to invest; but the ongoing chaos and confusion from the federal government level is producing sovereign risk in relation to doing business in Australia and causing a crisis of confidence. There is no doubt that Australians are waiting for 14 September with bated breath so we can have a renewal of confidence in government in Australia, refresh the settings of confidence in our economy and renew people's willingness to spend, people's willingness to invest and people's willingness to employ. I do not think that should be underestimated when you consider the record of the government—and it does not matter what sector you go to.

I cannot let an appropriation bill speech go by without mentioning that defence expenditure as a percentage of GDP is now at levels not seen since 1938. Not since 1938 have we seen defence expenditure so low. On the Labor Party's own website, it says that the first priority of government must be defence, protecting Australia. If that is the first priority of national government, and it is, why has $25 million been cut from the defence budget? The coalition believes that the purpose of a national government, the first priority of a national government, is defence of the nation. Under the Howard government, defence expenditure was cauterised from cuts. It was protected from savage cuts. Yet this government has sent our nation, with our proud Australian military tradition, to defence expenditure levels not seen since 1938. It raises serious sustainability questions for the operation of the Australian Defence Force, its ability to engage in overseas operations in the region and its ability to deploy when necessary to protect Australia's regional and national interests.

Again, it does not matter what sector you go to; the low revenue and the problems that we have seen from the budgetary mismanagement over the last five years are having an impact on confidence. Certainly, it is the case that Labor has a spending problem, not a revenue problem. We have seen a lot made of the fact that revenues have fallen. From the overblown projections that we have seen, revenue has fallen. But revenue in 2013-14 from this budget is projected to be $80 billion higher than at the end of the Howard government. That sounds like a lot of money, but it is not as much money as the $120 billion more in expenditure than at the end of the Howard government, which highlights why we are in such deficit. It is not that we do not have more money than we did in 2007—we do have more revenue and more income—but that we have expenditure on a scale that has seen six budget deficits and debt continuing to balloon out.

Budgetary mismanagement has consequences for all Australians. It has consequences not just for small businesses and medium-sized enterprises but also for individual families. For households, 29 increased or new taxes and charges mean increased cost-of-living pressures. There is no greater issue in any metropolitan city—I come from an outer-metropolitan electorate myself—than cost-of-living pressures. We have heard today that evidence has been produced that electricity prices will soon be double what they were when this federal Labor government was elected. They will have doubled for households and doubled for businesses.

Ms Rishworth interjecting—

Mr HAWKE: In Sydney, that has had a huge impact. Not only do electricity prices have an impact on households; they have an impact on businesses and on the cost of doing business in Australia. Access to cheap electricity is of course providing a resurgence in the American economy: cheap energy. Cheap energy is critical, which is why you would not introduce the world's biggest carbon tax at a time when electricity prices are already rising.

Apart from the revenue implications, the other issue is that these are 'Treasury's figures'. The government have no responsibility for their own budget, according to the Treasurer—and according to the members opposite, including the member for Kingston. They have no responsibility for their own budget. But somebody is getting these figures wrong. And somebody is getting these figures wrong in terms of the carbon price, because I can tell the member for Kingston and other members present that the carbon price will not sit at $12 per tonne when the European carbon price is now collapsing—

Ms Rishworth interjecting—

Mr HAWKE: The member for Kingston does not understand the market, because the price would not be set by Treasury and it would not be set by the government. The market must flow, and the market in Europe says that the price per tonne is very low. The market price is at rock bottom. So having an Australian carbon price of $12, or having an Australian carbon price which could reach up to $30, is not a market mechanism; it is an arbitrary mechanism. It is a failure of government to be imposing the price well above what you can get in all the other markets in the world today. It will not be good for Australia because you can buy emissions at $4 or $5 a tonne in Europe, whereas here we are mandating $12 in the budget. Of course, that is not the government's figure—the member for Kingston did not come up with that—that is some Treasury bureaucrat!

Surely, it is the role of government to question the bureaucracy and ask, 'Where did that figure come from and why is it not in line with world expectations on carbon pricing?' It is yet another example of the dishonesty and deceit that is in this budget. If the government bases its budget on projections that are wrong, on forecasts which are unreasonable and on figures which will never come to fruition it is setting our nation up for failure. Australians, and all members of this House, are looking for a new start in a new parliament with a government that has a consistent and firm approach to budgetary matters. The coalition has a real solutions plan to restore hope, reward and opportunity for Australians.